Question: What is the difference between an over-optimized site and a low quality site?

I would say the two are inextricably related.

An over optimized site, one that would trigger this questionable and (as always) mysterious, over-optimization penalty, is per definition a low quality site. Since, if it would be a quality site, there would be no reason to penalize it.

In that perspective, hasn't it been Google's primary efforts for the last many years, to let quality sites rank high and to keep low quality sites at the bottom of the rankings (or even penalize them when they violate the webmaster guidelines)?

Therefore I don't really get what all the fuzz is about with this 'optimization penalty'. Striving for quality content will still be the primary objective for Google. Excessive SEO is an indication for low quality content (one of the many), but should never be the 'target' itself.

As for the guidelines in this post:

1-3: Titles that don't make sense, keyword stuffed blocks/pages, spammy-looking internal (footer) links, etc. are all indications of low quality content. If i.e. Google has found some new way to interpret whether a title phrase is naturally build or not, it would be likely that they would use this to improve their search algorithms instead of using it to penalize over-optimized websites.

4-6: Incoming links from spammy/penalized/low-value sites: Don't we already know that Google doesn't pay much respect to these kinds of links or even completely disregards them? Trying to distinct genuine, respectful links from the ones mentioned above should be Google's primary objective. Let's say if 'in the ideal world' Google would have a way to flawlessly valuate links. Would there be any need to penalize websites for link manipulation? No, because those sites will have little or no benefit from those links anyway.

7: Different pages for basically the same content/set of keywords. Again, the misuse of keywords/on-page optimization should not be Google's concern. Google's concern is to make sure that they can identify user-intent as best as possible and deliver the best matching search results accordingly. When someone searches for 'online shop' the results should be nearly identical as when he or she searches for 'online store' IF Google identifies that the user-intend is the same for both queries.

Obviously, the examples mentioned above are a bit oversimplified, but I do believe that Google's emphasis does not (and should never) lie on recognizing/penalizing over-optimization. In the long run such a strategy could never work, it is like a cat chasing it's own tail.

About the images > different URL's (which is basically the same problem as using choice lists which trigger different URL's, also used by a lot of e-Commerce solutions):

Is this really a problem if u have a choice list written in javascript and 0 links to the URL's where any entry of the choice list is filled in? There is simply no way for Google to index this page, is there?

Of course, all assuming that other sites are not linking to the URL's generated by the choicelists (only to the 'standard' URL's).

Just stumbled upon this old article, but couldn't resist to add my 2 cents.

I think that the more popular the keywords, the more important PR becomes. Topsites that rank high on very populair keywords are usually fairly SEO-optimized. There probably isn't thát much to gain anymore SEO-wize, so PR becomes more important. However on long tail keyword, optimizing the pages SEO-wize may have significant more impact then PR.This is consistent with Reg NBS-SEO's findings.

As far as the statistics go, I believe that it is very hard (if not impossible) to provide accurate, valid samples for these kind of analyses and it would need a team of SEO-experts & experienced statisticans to analyse this data and provide usefull and valid conclusions. I'm not saying this article is persé invalid or ill-founded, but the way in which it is written and in which the experiment is set up doesn't indicite an analyses as mentioned above.

For instance the analyses (I'm referring to the previous article now*) would probably show a very different outcome if less populair keywords (i.e. long tail) were used.

*My comment is based on both this article and it's prequal (http://www.seomoz.org/blog/the-science-of-ranking-correlations), since this is the latter, I post it here.